24/7 Wall St. Insights
- The McDonald’s Corp. (NYSE: MCD) board of directors needs to decide if following the example set by Starbucks Corp. (NASDAQ: SBUX) might turn the company around.
- The coffee shop operator now has a “change agent CEO.”
- Also: Dividend legends to hold forever.
McDonald’s Corp. (NYSE: MCD) stock chart looked like that of Starbucks Corp. (NASDAQ: SBUX) for over a year. Both declined as same-store sales started to turn ugly and were not helped much by recent earnings. The Starbucks chart suddenly improved sharply as the company hired Chipotle CEO Brian Niccol. Niccol was so important to his new board that they awarded him a pay package of $133 million, which included a long-term incentive.
Will McDonald’s Seek a Fresh CEO?
McDonald’s board must decide if it also needs a “change agent CEO” to turn the fast-food company around. Chris Kempczinski has led the company since he took the board chair role last March and has been CEO since November 2019. He has been a company man since he joined McDonald’s as an executive vice president in 2015. Boards often look to outsiders to fix severe and long-term problems.
Like Starbucks, McDonald’s same-store sales declined in the last quarter, down 1% compared to last year. Earnings dropped from $3.17 per share to $2.97.
McDonald’s has launched a $5 meal deal to bring back customers. Several competitors matched this. It appears that the idea has not worked well. According to TheStreet, “Now, more than a month after the menu made its debut, McDonald’s is reportedly failing to see it boost foot traffic at its restaurants, according to BTIG analyst Peter Saleh, who analyzed a series of franchise checks conducted by his firm.” There is also a question about whether the deals are profitable.
Many were surprised when Niccol was hired at Starbucks. How could any CEO fight a battle against higher-priced menu items? How could anyone get people who think food is too expensive to change their minds? The Starbucks board believes Niccol can work some magic. It is the kind of magic McDonald’s needs as well.
This Fast-Food Chain Has the Absolute Lowest Customer Satisfaction Score
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
